Is the business good?
How good a business is ARM?
Arm Holdings plc earns 15% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
15%
Return on invested capital · cost of capital 9.0% · 6.2 points above what the capital costs: growth creates value
- Operating margin
- 18%
Operating margin · Semiconductors median 8.5% · 12 months to Q4 2026
- Cash conversion
- 1.08×
Cash conversion · 0.23× a year ago · every dollar of reported profit arrived as cash, and more
- R&D as % of revenue
- 56%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2022 | 23% |
| FY2023 | 25% |
| FY2024 | 3.4% |
| FY2025 | 21% |
| FY2026 | 18% |
Details›
- Gross margin12 months to Q4 2026
- 98%
- Operating margin12 months to Q4 2026
- 18%
- Net margin12 months to Q4 2026
- 18%
- Free cash flow margin
- 20%
- R&D as % of revenue
- 56%
- Revenue, trailing twelve months
- $4.92B
- Free cash flow, trailing twelve months
- $979M
- Net income, trailing twelve months
- $904M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 15%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Semiconductors
Ranks #34 of 48 by Smart Score